Personal Trust

AAA

DEFINITION of 'Personal Trust'

A trust created for a person or persons. Personal trusts can be used by wealthy or middle-class beneficiaries to accomplish a variety of financial objectives. Personal trusts are separate legal entities that have the authority to buy, sell, hold and manage property for the benefit of their beneficiaries.

INVESTOPEDIA EXPLAINS 'Personal Trust'

Personal trusts can take many forms. They can be revocable or irrevocable, living or testamentary. They can fund education expenses, meet special needs of beneficiaries or allow them to avoid or reduce estate taxes. They can also be separate taxable entities or pass-through entities.

RELATED TERMS
  1. Declaration Of Trust

    A statement made by the title holder of a piece of property that ...
  2. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Blind Trust

    A trust in which the executors have full discretion over the ...
  4. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  5. Estate

    All of the valuable things an individual owns, such as real estate, ...
  6. Pass-Through Security

    A pool of fixed-income securities backed by a package of assets. ...
RELATED FAQS
  1. What is the difference between the death benefit and cash value of an insurance policy?

    One of the most utilized tools in funding an estate plan is term or permanent life insurance. Purchasing a life insurance ... Read Full Answer >>
  2. What does U.S. law say about contingent beneficiaries?

    In the United States, posthumous asset transfers only require the listing of a primary beneficiary. Contingent beneficiaries ... Read Full Answer >>
  3. How do I change my contingent beneficiary?

    Keeping your beneficiary designations up to date is an important aspect of comprehensive estate planning. Listing a primary ... Read Full Answer >>
  4. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    One of the most common mistakes in estate planning is not keeping beneficiary designations up to date on life insurance policies ... Read Full Answer >>
  5. What kinds of assets can be included in a revocable trust?

    A revocable trust is an important part of estate planning. The trust document allows a living grantor to receive income from ... Read Full Answer >>
  6. How do you set up a revocable trust?

    A revocable living trust (RLT) is an arrangement in which a grantor transfers ownership of property through a trust. The ... Read Full Answer >>
Related Articles
  1. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  2. Economics

    What is a Fiduciary?

    A fiduciary is a person who acts on behalf of another person (or people) to manage assets.
  3. Retirement

    Retirement: The Journey Of 1000 Miles

    Substantial time should be set aside to fully outline one's vision for retirement and the specific steps that must be taken to realize it.
  4. Professionals

    Tips for Spreading the Wealth to Relatives

    There are many ways that your clients can move money or other assets to relatives in order to reduce their tax bills. Here's a primer on best practices.
  5. Professionals

    Tips for Handling Client Inheritance

    When clients leave or receive an inheritance, be prepared to deal with much more than mere paperwork or financial transactions.
  6. Professionals

    Advice on Dealing with Unequal Inheritances

    When it comes to inheritances, the concept of equal versus equitable can be hard to navigate, even when all parties are reasonable.
  7. Professionals

    Top Tips for Family Wealth Transfers

    Essential tips for tackling family wealth transfers.
  8. Professionals

    Estate Planning Tips for Financial Advisors

    Estate planning is not a set-it-and-forget-it proposition. Here are some tips for you and your clients.
  9. Personal Finance

    What's an Irrevocable Trust?

    In an irrevocable trust, the grantor gives up the right to revise, amend or terminate the trust without the permission of the beneficiary. An irrevocable trust is best used as an estate-planning ...
  10. Personal Finance

    Agency Theory

    An agency relationship exists when one person -- called a principal -- hires another person -- the agent -- to act on his behalf. Agency theory is concerned with resolving problems that develop ...

You May Also Like

Hot Definitions
  1. Coupon

    The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  4. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  5. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
Trading Center